How Do I Pay U.s. Taxes

[Mac7unix]

yes i know its long over due, the deadline is next month, no need to tell me that. Anyway heres the deal. I am so confused over US taxes while working abroad. I have looked over a few things on the IRS but darn its just so long. Hope you can help here's my status

1.Have thai wife, work in the her family business

2. Have work permit, non immigrant b visa

3. Income paid to me is 30,000 baht per month but I have free rent, free food, company car

4. I have been in thailand before febuary 2008 ( 2 weeks in japan though, holiday, 1 week singapore holiday )

5. Have extra money depending how good my promotions are that customers are interested trying.

so what exactly do I do

what forms must I download, fill out and send to the US

any advice you can give me would be really helpful

[Jingthing]

You have an automatic two month extension from April 15 on both filing and paying if you are abroad on April 15.

[wasabi]

If you pay taxes here I think you can declare some type of foreign tax exclusion, otherwise I'd just state how much you earn and pay the applicable US taxes. You can do it online with a program like Turbotax

Edited March 19, 2009 by wasabi

[Jingthing]

You cannot efile if you are stating a non-US address, for example, Thailand.

[Scott]

Are you sure you can't file by the internet. This is how I have been doing it for a long time and I file in Thailand. Only once did it reject it, but I think that was because of some inheritance which required some special forms. In that case, they were still on-line and I just printed them and mailed them.

You have a large income exclusion overseas, so you wouldn't have a W-2.

Best of luck.

[OriginalPoster]

Are you sure you can't file by the internet. This is how I have been doing it for a long time and I file in Thailand. Only once did it reject it, but I think that was because of some inheritance which required some special forms. In that case, they were still on-line and I just printed them and mailed them.

You have a large income exclusion overseas, so you wouldn't have a W-2.

Best of luck.

The "foreign address" problem might be a limitation of the TurboTax software package (as opposed to a limitation of the IRS's e-File system). I've heard the claim made that the TaxAct software package does not have that problem, though I don't know if that's correct.

Aside from the foreign mailing address, there are a few other "unusual" tax situations that can trip up eFiling as well. It seems that the eFile system, and the associated 3rd party software, are not yet comprehensive. I attempted to eFile this year but ultimately gave up and snail mailed the return instead.

Edited March 19, 2009 by OriginalPoster

[longball53098]

If you are in BKK make a trip to the US Embassy American Citizens Services on Wireless Road. They can supply you with the tax forms and information and I believe give you names of tax accountants that can help you.

[NaiGreg]

Here is the link http://www.pay1040.com

This is an authorized-by-the-IRS service for people who wish to pay taxes by credit card. pay1040.com

There is a 3% fee but that is about what the credit card companies charge and the government won't cover it. But it's worth it for the convenience (for some)

oops (forgot) you are still responsible for making sure the 1040 form is delivered by April 15. The pay1040 service is for those not receiving a rebate.

Edited March 20, 2009 by NaiGreg

[MeetJohnDoe]

You have an automatic two month extension from April 15 on both filing and paying if you are abroad on April 15.

The extension applies to FILING ONLY...any taxes due for the relevant taxable year are still due and payable on April 15th!

Therefore, if one is going to take advantage of the filing extension, and is unsure of the exact amount that is due (because the forms have not yet been completed), one should make an estimated payment or pay at least what one paid in taxes for the previous year by April 15; and then claim any refund due when the return is filed sometime on or before June 15.

[PeaceBlondie]

Folks, we may be ignoring an important point. The US taxpayer earning wages in Thailand has to file and apply for the earned income exclusion. If he does so, he owes zero tax. He files form 2555, the simple version. He claims either the physical presence test or the residency test. In his case the residency test may be easier.

The deadline is June 15 to file, and if he owes no tax, the deadline for paying is moot.

Download form 255EZ, Form 1040.

[Jingthing]

You have an automatic two month extension from April 15 on both filing and paying if you are abroad on April 15.

The extension applies to FILING ONLY...any taxes due for the relevant taxable year are still due and payable on April 15th!

Therefore, if one is going to take advantage of the filing extension, and is unsure of the exact amount that is due (because the forms have not yet been completed), one should make an estimated payment or pay at least what one paid in taxes for the previous year by April 15; and then claim any refund due when the return is filed sometime on or before June 15.

I truly think you are wrong for the expat extension. I think it is an AUTOMATIC extension; the extension is for filing AND paying. That is how I read the text from IRS anyway. This is the TWO MONTH automatic extension you get if you are out of the country on April 15. No form needed to get this extension. We have a few experts here who can hopefully settle this controversy.

Edited March 20, 2009 by Jingthing

[OriginalPoster]

You have an automatic two month extension from April 15 on both filing and paying if you are abroad on April 15.

The extension applies to FILING ONLY...any taxes due for the relevant taxable year are still due and payable on April 15th!

Therefore, if one is going to take advantage of the filing extension, and is unsure of the exact amount that is due (because the forms have not yet been completed), one should make an estimated payment or pay at least what one paid in taxes for the previous year by April 15; and then claim any refund due when the return is filed sometime on or before June 15.

I truly think you are wrong for the expat extension. I think it is an AUTOMATIC extension; the extension is for filing AND paying. That is how I read the text from IRS anyway. This is the TWO MONTH automatic extension you get if you are out of the country on April 15. No form needed to get this extension. We have a few experts here who can hopefully settle this controversy.

I think that John Doe is correct. See IRS Publication 54 at http://www.irs.gov/publications/p54/ch01.html where it says:

"You can get an extension of time to file your return. In some circumstances, you can also get an extension of time to file and pay any tax due.

However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid."

Edited March 20, 2009 by OriginalPoster

[Jingthing]

OK, I looked this up. I was correct you do not have to PAY the tax on 15 April but I was incorrect in that you will be charged interest if you don't. The clear implication of this is that there will be no PENALTIES for not paying 15 April, but interest, yes.

From this years printed IRS Forms and Instructions Book.

Page 7 and 8:

If you are a U.S. citizen or resident alien, you may qualify for an automatic extension of time to file without filing form 4868. You qualify if

...

-- You live outside the United States ... and your main place of business ...

is outside the United States

This extension gives you an extra 2 months to file and pay the tax, but interest will be charged from the original due date.

Edited March 20, 2009 by Jingthing

[lopburi3]

TaxAct indeed can handle foreign address and can be filed online/or by mail. I have been using for the last 10 years. I would strongly advise using a computer type program if you have no knowledge of the laws (or even if you do; as a double check).

[Jingthing]

TaxAct indeed can handle foreign address and can be filed online/or by mail. I have been using for the last 10 years. I would strongly advise using a computer type program if you have no knowledge of the laws (or even if you do; as a double check).

Thanks for that. The ones I have looked at don't support foreign address.

[OriginalPoster]

OK, I looked this up. I was correct you do not have to PAY the tax on 15 April but I was incorrect in that you will be charged interest if you don't. The clear implication of this is that there will be no PENALTIES for not paying 15 April, but interest, yes.

Definitely no penalty (other than the interest). I think that the interest is something on order of 1/2% per month on the outstanding balance, which in most cases probably won't add up to much.

[OriginalPoster]

TaxAct indeed can handle foreign address and can be filed online/or by mail. I have been using for the last 10 years. I would strongly advise using a computer type program if you have no knowledge of the laws (or even if you do; as a double check).

Do you happen to know if TaxAct will allow you to file in the case in which you need to file Form 4852 and your employer does not have an EIN number?

[PeaceBlondie]

Indeed, penalties and interest are separate. Almost nobody gets interest forgiven, except as provided by law. Penalties are numerous: for late filing, for late paying, negligence, understatement, overstatement, etc. Some penalties can draw interest. There are different starting and stopping dates. I used to be able to compute balances due when all kinds of penalties applied. Your payments first go toward penalties then interest, and then to tax, if I remember the olde days.

[runner]

you pay taxes?

I have a website. no taxes anywhere. heheh.

[Old Man River]

Penalties are numerous: for late filing, for late paying, negligence, understatement, overstatement, etc. Some penalties can draw interest.

Unless, of course, you are a member of Obama's cabinet in which case no penalties are owing.

Sorry, off topic I know, but I just had to say that.

[PeaceBlondie]

Penalties are numerous: for late filing, for late paying, negligence, understatement, overstatement, etc. Some penalties can draw interest.

Unless, of course, you are a member of Obama's cabinet in which case no penalties are owing.

Sorry, off topic I know, but I just had to say that.

Penalties are more easily forgiven than interest. But I didn't go to school with Timmy in Bangkok, so I don't know about that.

[MeetJohnDoe]

I think my interpretation is correct! I have lived in LOS and filed from here (for US based income) for a decade so have made a close read of the relevant IRS publications and instructions on this matter.

And JT is correct, the extension to FILE is automatic if you are traveling or residing overseas on April 15th of any given tax year. There is no form to file in order to get this extension, all that is required is that one write at the top of their Form 1040 something like: "I was residing [or living] overseas on April 15, 2008." or "I reside outside the United States and was overseas on April 15, 2008" or words to a similar effect.

I reiterate that any taxes owed are due and payable on April 15th, however. Do you really think the US government would give citizens working or retired overseas 2 extra months to pay their taxes! What planet do you all live on? Just within the past couple years, some yahoos in Congress (i.e., Republicans) tried to strike the overseas earned income tax credit from the tax code! Their image of any US citizen not living in the crappy and decrepit USA is that they must be either a tax dodger or living the life of Riley sipping espressos on the Champs-Elysees (or Beach Road in my case) and reading the International Herald Tribune; and they ain't gonna make paying our taxes any easier.

Edited March 20, 2009 by MeetJohnDoe

[Jingthing]

An automatic two month extension without filing a form and no penalties for not paying due tax for two months is indeed a BREAK.

Edited March 20, 2009 by Jingthing

[MeetJohnDoe]

An automatic two month extension without filing a form and no penalties for not paying due tax for two months is indeed a BREAK.

It is true you can delay your tax payment until the June 15 extension to file date. Hoewever, if you do not make an estimated tax payment based on the information available to you at the time (by the latest, April 15) and it turns out you underpaid/owed taxes when you make the final calculations and file the return on June 15, you will owe interest on the amount of the underpayment.

Also, if you meet the overseas residency test, you can be physically present in the USA on April 15 and still get the automatic 2 month "overseas" extension and file your return on June 15.

[OriginalPoster]

An automatic two month extension without filing a form and no penalties for not paying due tax for two months is indeed a BREAK.

It's somewhat a break, but it's nothing special for expats except in the sense that you get it automatically without needing to apply for it. Can't almost any stateside person also get the same (or even longer) break by manually filing Form 4868 to gain themselves 6 extra months?

Edited March 20, 2009 by OriginalPoster

[OriginalPoster]

Penalties are numerous: for late filing, for late paying, negligence, understatement, overstatement, etc. Some penalties can draw interest.

Unless, of course, you are a member of Obama's cabinet in which case no penalties are owing.

Sorry, off topic I know, but I just had to say that.

I had what I thought would be a penalty situation vanish one year too, it doesn’t seem to be just the rich and famous that it happens for. Or perhaps it just means that I'm well-qualified to work for Obama. That year, Price Waterhouse Coopers was hired to do my taxes and for various reasons the return was submitted almost one year late. It turned out that the IRS owed me a refund (instead of me owing them money) so interest charges weren’t in play, and PWC told me that they we going to take the position with the IRS that no penalty should apply. I don’t have any idea what, if anything, PWC said to the IRS, but the result was no penalty. That was quite a relief for me because I had feared that being so late would cause big trouble.

Edited March 20, 2009 by OriginalPoster

[lopburi3]

TaxAct indeed can handle foreign address and can be filed online/or by mail. I have been using for the last 10 years. I would strongly advise using a computer type program if you have no knowledge of the laws (or even if you do; as a double check).

Do you happen to know if TaxAct will allow you to file in the case in which you need to file Form 4852 and your employer does not have an EIN number?

Have no experience but it allows interest without a 1099/numbers so would expect that it could. Believe it is free to try so you can take it for a test drive.

[Old Man River]

TaxAct indeed can handle foreign address and can be filed online/or by mail. I have been using for the last 10 years. I would strongly advise using a computer type program if you have no knowledge of the laws (or even if you do; as a double check).

Lopburi3, are you using a Thai address and have no W-2's (i.e. work for a Thai company that doesn't issue W-2's)? I have been using TaxCut (H&R Block) for a few years and it won't allow e-filing for me or several of my friends under the same circumstances.

From your post I am beginning to wonder if the problem is that I am not using TaxAct, or if it is that I just don't qualify for e-filing.

[PeaceBlondie]

OriginalPoster, there is never a late filing penalty if the IRS owes you a refund, because that penalty is calculated on the underpayment, which is nonexistent. In the olde days, you would have earned interest from the IRS! But they changed that, and many other things.

[OriginalPoster]

OriginalPoster, there is never a late filing penalty if the IRS owes you a refund, because that penalty is calculated on the underpayment, which is nonexistent. In the olde days, you would have earned interest from the IRS! But they changed that, and many other things.

Ah, you're bursting my bubble - I thought I was special. I guess that Obama's not going to want hire me then.

Edited March 20, 2009 by OriginalPoster